Working together with other central banks, the Federal Reserve gave a big boost to financial and precious markets Wednesday. The Fed and other central banks are cutting the cost for foreign countries to borrow dollars from their own central banks in half, according to news reports. The cheap loans will be available all the way out to February 2013. Word of increased liquidity as a result of the lower costs to borrow dollars reassured market participants, who sent stocks and precious metals surging higher.
Spot gold was up more than 1.75% Wednesday with a bid price of $1,745.40 per ounce and an ask price of $1,746.40 at 10:20 a.m., having traded as high as $1,751.50 and as low as $1,729.60. The London afternoon reference price fixing came in at $1,746, according to Kitco market data.
Spot silver was up nearly 1.7%, bid at $32.46 with an ask price of $32.56. The morning high as of time of writing was $32.70 and the low was $31.85. Monday’s reference price was set at $31.35 in the London a.m.
Gold and silver trusts were showing strong morning gains.
In an abrupt turnaround from recent steep losses, gold and silver mining ETFs were surging higher.
Gold mining shares were climbing steeply, with today’s coordinated central bank action adding more fuel to NovaGold Resources‘ (AMEX:NG) recent surge upwards.
Silver mining shares also were moving higher Wednesday.
As of this writing, Andrew Burger did not hold a position in any of the aforementioned stocks.